About a year and a half ago, we speculated on possible industry structure changes and consolidation and convergence trends afoot as AT&T announced its intention to acquire Time Warner. Now that the merger is finalized after a long legal battle, we wonder what’s next for the key telecom operators in the U.S. with apparently divergent strategies.
Verizon appears keenly focused on building out 5G network; T-Mobile and Sprint are eager to combine forces to battle, on par with the top two mobile carriers. Cable operators are eager to supplement their core broadband and video distribution businesses with mobile offerings. While AT&T and Comcast appear to be diversifying revenue across distribution and media businesses, Verizon and others seem content to stick to the network business for now.
So, who has the winning strategy?
To answer that question will certainly entail deeper questions and numerous detailed analyses, but our first thought is: Will Time Warner media assets provide competitive advantage for AT&T? Exclusivity with the iconic iPhone was a big boost for AT&T a decade ago.
Coinciding with the 3G to 4G network transition, iPhone was coveted by many high-value customers who readily switched over to AT&T at that time to have the iconic device. Sprint and T-Mobile arguably lost a lot of postpaid customers during the early days of iPhone, from which they never fully recovered.
Will the Time Warner merger bring about the "iPhone moment" for AT&T? We will be closely monitoring what new mobile service (bundling) offerings AT&T will bring to the market.
It will be interesting to see whether AT&T will be playing offense or defense now that Time Warner is within its fold.
Kyung Mun is a senior analyst at Mobile Experts LLC. Mobile Experts is a network of market and technology experts that provides market analysis on the mobile infrastructure and mobile handset markets. Over the course of his 20+ years in wireless and cable industries in a dynamic range of roles from engineering to product management and technology strategy, Mun has contributed to the advancement of mobile communication while working at leading companies in the mobile value chain including Motorola, Texas Instruments, Alcatel-Lucent and a few startups in between. He holds undergraduate and graduate degrees in electrical engineering from the University of Texas at Austin and Georgia Tech, and studied finance and strategy at Southern Methodist University.